If you're running a regular event or meetup group that charges for events or sells sponsorships, you're going to need a plan for what to do with the money.

In the beginning, it won't be much and you can keep it in your personal bank account (or in a lockbox under your bed...). But after a little while, you're going to get uncomfortable with mixing personal and meetup finances. Many people start exploring starting a legal entity of some sort.

A friend of mine is in this position now with one of his meetups. He emailed me for advice, and I thought I would post my response for the benefit of others.

Yourself: This is what I did for a while when things were smaller and I didn't have much carry over from month to month. Once I started booking multi-month sponsorships and some larger deals though, I got nervous about having it so tied in with my personal finances. It got to the point where it became simpler to keep it separated. If you don't have much left over, or this doesn't happen super often, you can probably get away with this. If you're thinking about it though, maybe you're past that point.

LLC: This is what I've done with my meetups (I actually just set up one LLC and ran multiple through that). It was pretty fast and easy to set up a sole proprietorship LLC. If you have more than one person who manages the meetup group, you could also set up a joint partnership LLC... but it might be worth it to just make someone "the money person" and have them set up the sole proprietorship LLC. Usually your state's website will have a walkthrough or a guide for all the paperwork you need to fill out. This will also let you get a business bank account, so you can keep the money physically separated. You can also get a separate debit card/checkbook just for that account, etc.

501(c)3: Having been a part of several non-profits... this is way more work than it's worth. Don't bother. You get a few tax benefits, but in exchange for a huge amount of oversight and reporting you'll have to do to maintain that status. Just pay the taxes and get on with what you actually want to do.

A fourth option is to find another organization, partner with them and treat them like an umbrella. Use their infrastructure to manage the money for you. I'm part of a few organizations that do this. Access to money can be a bit slower, but you don't have to deal with any of the business/tax side of things. It's important here that you find the right organization to do this - you have to trust them a lot if you're giving them all your money.

Setting up a simple LLC is probably your best bet. It lets you open a business banking account and get the money out of your personal account.

Enjoy!

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I run a lot of events - everything from the Hacker News Seattle Meetup to Ignite: Seattle to Startup Weekends to the Seattle Customer Development Meetup. For most of these events, I end up selling sponsorships to cover the costs. My friend is planning a conference and recently asked me for advice on how to sell sponsorships. This is my email back to her:

The biggest thing you need to answer is "What does the sponsoring company get out of this?" For the tech meetup events I run, it's usually either A) They're recruiting and want to recruit people at my event, B) They're trying to promote their product or service and get more people to use it, or C) They recognize the importance of supporting the community, and they're successful enough that they can spare the resources (this one is extremely rare. People will often say this, but the real reason is usually more like #1 or #2).

Once you figure out what they company wants, you can tailor the message a bit to them.

Now that you know what they want, it's time to go talk to them. You need to figure out who the right person to talk to at the company is. A good hack to do this is find other events they've sponsored, talk to the organizer for that event (organizers tend to be very friendly people! Just shoot them an email if you don't know them) and ask who their primary contact was.

If the organizer doesn't know you, they may not be comfortable introducing you. Instead, try asking for the contact information and offer to cold email the contact and not mention the organizer at all.

One thing leads to another. I screwed up my 2007 tax return and got audited (not a big scary one, just a "fix this or pay us" notice), which motivated me to go overboard and learn everything there is about taxes, as they relate to my finances.

I then started a rudimentary expenses sheet in Excel, just as reader and blogger, Mark left a comment telling me that I should read up on double-entry accounting. So I did.

As as side note, I really appreciate it when people suggest things to learn about or read, as they relate to my posts. I can't think of the others offhand, but I know there have been a few other big ones.